End The Ethanol Subsidies. Now!
We previously growled about federal energy subsidies on March 19, 2011 after our friends at the National Taxpayers Union released a “coalition letter” telling Congress it’s time to put an end to energy subsidies. In an op-ed in the weekend edition of the Washington Examiner, Diana Furchtgott-Roth makes much the same argument, but focuses on the need to end ethanol subsidies. She writes:
“With gasoline above $4 a gallon, it's time to rethink the $6 billion Uncle Sam spends annually on ethanol subsidies paid to corn growers and ethanol producers.
“Ethanol increases the price of gasoline, pollutes the air, and drives up food costs, as well as increasing the deficit, which this fiscal year stands at $1.6 trillion.
“Ethanol, a corn-based fuel that can be substituted for some of the gasoline needed to operate vehicles. But the gasoline-ethanol blend, currently 10 percent ethanol, lowers vehicles' gas mileage, leaving motorists with higher fuel bills.
“Congress, in the energy bill signed into law in December 2007 by President George W. Bush, agreed to require the use of 14 billion gallons of ethanol or other renewable fuels this year, with quantities gradually increasing to 36 billion gallons in 2022.
“Ethanol producers receive a tax break of 45 cents a gallon, and corn growers receive subsidies that Congress may increase in the next farm bill, in 2012.”
Ms. Furchtgott-Roth points out that because it separates from gasoline in the presence of water, it is costly to ship. In addition, she reports the Environmental Protection Agency is trying to force more ethanol consumption by allowing use of 15% ethanol in newer model cars as opposed to using a 10% blend in older models. Since the 15% ethanol blend can damage older cars, gas stations would have to operate different pumps for the two blends. Finally, the recent GAO report that identified duplicate programs (requires Adobe) found significant potential duplication in the ethanol programs. She summarized her column saying:
“Instead of subsidizing ethanol, America needs to ramp up domestic oil exploration and refining. That will start bringing gasoline prices down.”
Take a few minutes to voice your concerns to the poohbahs on Capitol Hill.
- Senator Jim Webb (D) -- write to him or call (202) 224-4024.
- Senator Mark Warner (D) - write to him or call (202) 224-2023.
- Representative Jim Moran (D) -- write to him or call (202) 225-4376.